COMPETING FOR LAND OR ENERGIZING THE AGRICULTURAL SECTOR

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• COMPETING FOR LAND OR ENERGIZING THE AGRICULTURAL
  SECTOR?
• A combined top-down bottom-up approach to
  evaluating the bioenergy-food security nexus
• by
• Ingmar Jürgens and Gustavo Best
• Food and Agriculture Organization of the United
  Nations (FAO)
• Tel [phone] Fax [phone]
• e-mails ingmar.juergens_at_fao.org
  gustavo.best_at_fao.org url http//www.fao.org/sd
  
• Rural Development and the Role of Biomass
• International workshop as part of the Development
  and Climate Project
• 14-16 November 2005, Dakar, Senegal

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Different Forms of Bioenergy...

• Liquid Fuels
• Ethanol (e.g. from sugar)
• Methanol
• Biodiesel (e.g. from maize, rape seeds)
• Vegetable oils
• Solid Fuels
• Charcoal
• Briquettes
• Agricultural Residues

Gaseous Fuels Hydrogen Methane (e.g. from animal
manure) Bioelectricity

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Bioenergy, Development and Food Security as a
System
Bioenergy production
Access to Energy
Economic Development
Investment in infrastructure, jobs, etc.
Income
Agr. GDP
Food Security
Food production
Access to Food
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Energy demand
Energy prices
Bioenergy production costs
Bioenergy production
Access to Energy
Economic Development
Investment in infrastructure, jobs, etc.
Income
Agr. GDP
Food Security
Food production
Access to Food
Food production costs
Food prices
Food demand
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Bioenergy potential different scenarios, years
2025 and 2050 Exajoules/yr
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Bioenergy potential different scenarios, year
2050 Exajoules/yr
Potential for Oceania 4-6 times projected primary
energy use
Source E. Smeets, A. Faaij, I. Lewandowski, A
(2004)
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Bioenergy Potential Spatial distribution of
production cost of energy crops for abandoned and
rest land category in 2050
Source Hoogwijk et al. (2005)
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Whats Expected e.g. IPCC TAR (2050)
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• Main Benefits of Bioenergy
• Besides the diversification of the energy base
  and of rural economies, bioenergy...
• promotes additional employment and rural
  infrastructure
• ...stimulates the role of agriculture and
  forestry as
• energy producers
• ...contributes to domestic energy security
• ...helps mitigate climate change

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Implications for Agriculture

• livelihoods and employment
• species selection
• farming systems
• land use (rehabilitation of marginal/degraded
  lands)
• biodiversity
• agroindustries
• local, national and international trade
• partnerships with other sectors
• energy environment industry - trade

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• Determinants of Bioenergy Production
• Population growth and economic development
• Energy prices
• Food consumption per capita calorie intake and
  composition of diet
• Land use patterns (feasibility of
  marginal/degraded lands)
• Efficiency of food production crop yields,
  livestock production
• Forest productivity and sustainable harvest
  levels.
• Competing demands for land nature reserves,
  endangered/protected ecosystems, recreation,
  amenity
• Competing demands for wood and agriculture based
  bio-materials.

• Determinants of Food Security
• Population growth
• GDP growth per person
• Agricultural GDP growth
• Health expenditure as a proportion of GDP
• Proportion of adults infected with HIV
• Number of food emergencies
• UNDPs Human Development Index

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• Possible Bioenergy Effects
• Climate change mitigation
• Diversification of domestic energy supply (energy
  security, trade balance) energy access
• Development of infrastructures and jobs in the
  agricultural sector, especially in rural areas
• Technological development through investment in
  new technologies
• Environmental benefits
• Diversification of agricultural production
  through energy crops

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• Determinants of Bioenergy Production
• Population growth and economic development
• Energy prices
• Food consumption per capita calorie intake and
  composition of diet
• Land use patterns (feasibility of
  marginal/degraded lands)
• Efficiency of food production crop yields,
  livestock production
• Forest productivity and sustainable harvest
  levels.
• Competing demands for land nature reserves,
  endangered/protected ecosystems, recreation,
  amenity
• Competing demands for wood and agriculture based
  bio-materials.

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• Possible Bioenergy Effects
• Climate change mitigation
• Diversification of domestic energy supply (energy
  security, trade balance) energy access
• Development of infrastructures and jobs in the
  agricultural sector, especially in rural areas
• Technological development through investment in
  new technologies
• Environmental benefits
• Diversification of agricultural production
  through energy crops

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• Possible Bioenergy Effects
• Climate change mitigation
• Diversification of domestic energy supply (energy
  security, trade balance) energy access
• Development of infrastructures and jobs in the
  agricultural sector, especially in rural areas
• Technological development through investment in
  new technologies
• Environmental benefits
• Diversification of agricultural production
  through energy crops

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Water, yields, undernourishment
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• Possible Bioenergy Effects
• Climate change mitigation (CDM)
• Diversification of domestic energy supply (energy
  security, trade balance) energy access
• Development of infrastructures and jobs in the
  agricultural sector, especially in rural areas
• Technological development through investment in
  new technologies
• Environmental benefits (PES)
• Diversification of agricultural production
  through energy crops

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• Possible Bioenergy Effects
• Climate change mitigation
• Diversification of domestic energy supply (energy
  security, trade balance) energy access
• Development of infrastructures and jobs in the
  agricultural sector, especially in rural areas
• Technological development through investment in
  new technologies
• Environmental benefits
• Diversification of agricultural production
  through energy crops

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Ethanol and value added or simply sugar for
European refineries?
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Nutrition the case of Vietnam

• Determinants of Bioenergy Production
• Population growth and economic development
• Energy prices
• Food consumption per capita calorie intake and
  composition of diet
• Land use patterns (feasibility of
  marginal/degraded lands)
• Efficiency of food production crop yields,
  livestock production
• Forest productivity and sustainable harvest
  levels.
• Competing demands for land nature reserves,
  endangered/protected ecosystems, recreation,
  amenity
• Competing demands for wood and agriculture based
  bio-materials.

FAO
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Food security and climate change

• Determinants of Bioenergy Production
• Population growth and economic development
• Energy prices
• Food consumption per capita calorie intake and
  composition of diet
• Land use patterns (feasibility of
  marginal/degraded lands)
• Efficiency of food production crop yields,
  livestock production, water use
• Forest productivity and sustainable harvest
  levels.
• Competing demands for land nature reserves,
  endangered/protected ecosystems, recreation,
  amenity
• Competing demands for wood and agriculture based
  bio-materials.

• Minus 2-3 in African cereal production (2020) to
  raise numbers at risk from hunger by 10 million
  (Parry et al.1999)
• Intensive farming systems management flexibility
  ? buffer negative effects of climate change and
  benefit from the positive effects
• More extensive farming systems operating close to
  the threshold management options are fewer and
  they are more vulnerable to CC
• CC increase irrigation demand in the majority of
  world regions due to a combination of decreased
  rainfall and increased evaporation.

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Resources
Conversion Products
End-use
Soil protection
Export Competition
Biomass
Access to affordable energy
Carbon seqestration
Benefits
Employment
Economic development
Innovation
Carbon substitution
Watershed management
Industry Administration
Farmers associations
Industry
SME
Land-use administration
NGOs
Actors
Energy transmission, transportation sale
International Organisations
Farm workers, Landless
Science
Households
Agriculture/Forestry Administration
Energy Administration
Environment Administration
Land Competition
Development costs
Non-CO2 emissions
Pesticide Nutrient Leaching
Costs
Indoor air pollution
Soil Degradation
Transaction costs
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Bioenergy effects vs. Determinants of Food
Security

• Possible Bioenergy Effects
• Climate change mitigation
• Diversification of domestic energy supply (energy
  security, trade balance) energy access
• Development of infrastructures and jobs in the
  agricultural sector, especially in rural areas
• Technological development through investment in
  new technologies
• Environmental benefits
• Diversification of agricultural production
  through energy crops

• Determinants of Food Security
• Population growth
• GDP growth per person
• Agricultural GDP growth
• Health expenditure as a proportion of GDP
• Proportion of adults infected with HIV
• Number of food emergencies
• UNDPs Human Development Index

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Example Employment

• Measures for employment effects
• The direct employees consumption of private
  goods and services.
• The direct employees consumption of public goods
  and services.
• The directly involved companies consumption of
  goods and services from companies connected to
  other sectors in the economy

• Different producers
• Upgraded fuel producer
• Local fuel supplier
• Local small-scale heat producer
• Local large-scale CHP producer
• Farmer

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Different Implementation Modes

• Bioenergy industry This implementation mode
  refers to an industrial scale bioenergy plant
  whose primary business is to procure feedstock
  and produce an energy commodity (such as biofuels
  or electricity).
• Capital investments existing agro-processing
  facility or other biomass intensive industry such
  as a saw or paper mill invests in energy
  production from residues, either for its own
  consumption or for export, as an ancillary
  business activity.
• Community infrastructure In this implementation
  mode, a village or cluster of villages could own
  and manage energy facilities with or without
  contracting to private operators
• RESCOs Here, independent private Rural Energy
  Service Companies act as entrepreneurs providing
  energy services (rather than equipment) at a
  profit to villages, households or enterprises.
• Retail appliances In this mode, several small
  entrepreneurs are engaged in manufacturing and
  marketing a bioenergy technology (for example,
  cook stoves, biogas digesters, biofuels), which
  is ultimately widely distributed through standard
  retail channels.

Source ESMAP 2005
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Regional distribution of biomass sources in
Brazil (Amaral 2005)
NE Castor oil / Soya / Palm oil / Cotton
North Palm oil
CW Soya / Castor oil / Cotton / Sun flower
SE Peanuts/ Sunflower / Castor oil / Soya /
Cotton
South Soya / Cotton / Sun flower / Rape seed
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Competition
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Food requirements Population and Diet
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Different Bioenergy Sources with different land
requirements
Source Faaij/FAO 2005
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Global cost-supply curve for energy crops for
four SRES scenarios for the year 2050
Source Hoogwijk, Faaij, 2004
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Data for small-scale tree plantations in China
(Perlack 1996)
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Reference to economic criteria in the 9 studies
considered in percent
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Reference to environmental criteria in the 10
studies considered in percent
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Reference to social criteria in the 10 studies
considered in percent
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CER prices
Energy Market Models (IEA)
Other energy production costs
Global Land Use Models (IMAGE IIASA Alcamo et
al.
Energy demand
Energy prices
Energy import/export
Bioenergy production costs
Access to Energy
Bioenergy production
Income
Economic Development
Investment in infrastructure, jobs, etc.
Agr. GDP/ trade balance
Health HIV, ...
Food production
Food Security
Access to Food
Food production costs
Food import/export
Food prices
Food demand
Agriculture Market Models, PEM (FAO, OECD)
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Enhanced Energy Market Models (IEA)
Bottom-up Assessment of the Bioenergy and Food
Security Nexus
Other energy production costs
Energy demand
CER prices
Energy prices
Energy import/export
Bioenergy production costs
Bioenergy production
Access to Energy
Economic Development
Investment in infrastructure, jobs, etc.
Income
Agr. GDP/ trade balance
Health HIV, ...
Food Security
Food production
Access to Food
Food production costs
Food import/export
Food prices
Food demand
Combined Global Land Use and Agricultural Market
Models (IMAGE, IIASA and FAO, OECD)
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Learning from the Carbon market?

• Bioenergy projects do meet some of the
  sustainability criteria identified as relevant,
  by having to comply with the specific
  requirements of the funding arrangements under
  which they operate, i.e.
• General requirements for World Bank projects, for
  example the environmental safeguard policies
• Fund specific requirements, for example
  small-scale and community benefits under the CDCF
• Simple limitation in size small scale projects,
  as separate category of project types
• Participation in voluntary certification schemes
  is a possibility
• The Gold Standard
• The Community and Biodiversity (CCB) standards

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Conclusions

• The role of food production and thus competition
  for land might be overstated
• Food security and bioenergy systems are
  characterised by very complex interactions
  between the macro and micro level
• PEM (AG), Energy Models, and Global Land Use
  Models can be useful in determining the overall
  boundary conditions and some input variables for
  the evaluation of food security and bioenergy
• A careful, local/national analysis is required to
  qualify the different determinants of the food
  security and bioenergy nexus

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Conclusions II

• The results of this bottom-up can feed back into
  the design of effective policies and the
  macro-models for LU, Energy and AG
• For synchronising and/or coordinating the global
  modeling efforts a coordinating mechanism, forum
  or meeting point and respective incentives for
  collaboration for the different modeling
  communities should be created
• For the country level analysis, FAO would like to
  stimulate the formation of national task forces,
  subject to the interest of bioenergy producing
  member countries
• FAOs International Bioenergy Programme, to be
  launched next year, will offer a reference and
  framework for a concerted analysis of sustainable
  bioenergy in general and the bioenergy and food
  security nexus in particular

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Further and general conclusions

• Large potential for bioenergy in developing
  countries as energy source, bioenergy is
  becoming increasingly competitive
• Externalities can be significant large potential
  benefits but opportunity costs regarding land use
  of large scale projects are of concern
• Large climate change mitigation potential of
  bioenergy
• The delivery of SD co-benefits is not automatic.
  It would be strengthened by an institutionalizatio
  n of externalities valuation in the Energy
  market.
• Other drivers might be more important in the
  future (ex. oil prices)

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DANKE
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Quantity

• At least US 10 Billion in ERs are expected until
  2010
• The Worldbank Pipeline includes ER worth US 544
  Million ((as of November 2004), including 10
  Bioenergy, and the commitment of funding by the
  CF of the Worldbank equals US 845 Million.
• Foreign direct investment US 172 billion in
  2004
• Official development aid US 47.4 billion in
  2004 the estimated US1 billion per year of
  carbon payments (IISD 2005) is very low.
• Estimated expenditure in the energy sector
• annual fossil subsidies in the OECD and 20
  largest countries outside the OECD amounted to
  US 58 billion (in 2001)
• global subsidies to fossil fuels and nuclear
  energy in mid-1990s reached around US 250-300
  billion